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Cloud MES market to reach $2.34 billion by 2026

March 3, 2021
An IoT Analytics survey found that nearly a third of manufacturers plan to move their MES software to the cloud

IoT Analytics, a provider of market insights for the Internet of Things (IoT) and Industry 4.0, surveyed the IIoT market and found that almost one-third of manufacturers are planning to move their MES software to the cloud, significantly boosting the global Cloud MES market growth for the coming years.

"Companies are struggling to make use of their data in a meaningful way and use it to create value," said Knud Lasse Lueth, IoT Analytics CEO. "Today, a significant portion of this data is 'dark.' A major reason why data remains 'dark' is because existing tools are not designed to handle the volume and variety of data generated. Cloud technology helps to 'light up' this dark data in a powerful way."

(Source: IoT Analytics)

According to IoT Analytics, the cloud has shown itself to be more efficient than traditional means by providing a scalable infrastructure where data can be securely collected and accessed from anywhere and on any device.

"Benefits such as easy scalability, smaller upfront investments and operational costs, fast deployment, and remote accessibility also make the cloud advantageous for factories' manufacturing software," said Sharmila Annaswamy, analyst at IoT Analytics.

A Q4/2020 survey of 49 manufacturers conducted by IoT Analytics showed that the move of manufacturing software to the cloud is broadening and accelerating. While nearly 50% of today's PLM and ERP systems and roughly one third of MES/MOM and CMMS solutions are already partially deployed in either a private or public cloud environment, many companies are planning to move more such workloads to the cloud in the next 2 years. Approximately 29% of the respondents plan to move their manufacturing execution system to the cloud in the next two years.

ERP and PLM systems were the first software to migrate to the cloud and now MES/MOM systems and CMMS are increasingly moving to the cloud as well. 

IoT Analytics' latest report on the topic estimates the cloud penetration of Manufacturing Execution Systems to increase, with cloud MES forecasted to become a $2.34 billion market in 2026. End users are adopting cloud MES as it allows them to take advantage of the latest IoT technologies and offers better scalability than on-premise MES systems. Increased focus and investment on digitization efforts accelerated by the COVID-19 pandemic in developed economies will increase MES migration to the cloud.

The preferred method of migrating MES to the cloud depends on multiple factors such as capital investment, operational expenses, scalability and data ownership. Software-as-a-Service architectures are expected to grow considerably faster than Lift and Shift architectures due to the easy initial setup and integration with existing cloud-based software infrastructure. SaaS deployments are preferred by small and medium corporations looking to digitize their operations with limited upfront investment since SaaS solutions require little to no existing IT infrastructure.

IoT Analytics also found that cloud adoption is also accelerating three trends in the operation of future factories: the convergence of software tools, increasing integration of AI tools and increasing integration of digital twin capabilities.

Using the fast scalability and massive storage of the cloud, manufacturing software tools (particularly MES and IoT platforms) are increasingly integrating model-based digital representations of factories for process optimization, simulation, what-if/scenario analysis, and other use cases. MES vendor Plex, for example, offers a "what-if" analysis that leverages a digital twin of operations to simulate changes to operations such as new shifts, maintenance downtime, or availability. GE's Predix APM module offers digital twin-based asset performance management.

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